Does investing in bonds have sense?

Image for post
Image for post

Investment market has been quite rich recently. The form of investing our money depends really on the risk that we are tend to take. Clients who seek alternative and relatively safe investment resources could
be interested in bonds at the time of low interest rates and growing inflation (3.3% in June comparing to 2.9% in May as reported by Central Statistical Office, which is a lot more than forecasted by Development Ministry Polis h). It is not a secret that during ultra-low interest rates bank deposits are unprofitable. Money funds are also incapable of surprising with interest rates or their offers.
Taking into account current situation bonds are the choice of low risk. In recent years bonds market gained new fans which in turn influenced dynamic development of such solutions. Many websites allow education about the topic and promotion of certain offers. It should be remembered though that there are different kinds of bonds and different levels of risk connected with them. It is said that the safest are treasury bonds. Today the Ministry of Finance offers two-years bonds with the DOS0522 code that allow to earn 1.00% in the scale of one year. However, if one likes to buy these bonds directly on the stock exchange they would gain about 0.7%. We can deduct by ourselves. Nevertheless, Public Treasury in this situation acts as debtor which is at the same time a guarantee to buy those shares from their new owners and pay the rates back.
Another solution can be corporate bonds. Theoretically, they are said to bare higher risk, but is it really true? Such financial instruments are issued by big enterprises. Interests rates are related to their size and financial condition of issuer. We can count between from 4% to 10%. Offers can be adjusted and those values estimated to market average. The enterprises decide on different variants morbidity date, flexible or fix interests. Partly they are dependent on Warsaw Interbank Offered Rate (WIBOR) and margin and partly offer simple offers construction, which is easier to present in front of prospect investors. Provema Ltd. is an example of an enterprise offering fix interest rates. Potential gains in comparison to deposits or treasury bonds can be easily understood.
Bonds of whichever kind are a very good alternative to a variety of investment portfolio. Experienced investors, who are even decided to take higher risk, deposit their money in safer solutions with a smaller but certain interest. Beginners, in turn are given a chance of higher profit than from deposit
but keeping low risk level. Bonds are worth to invest in regardless experience and view in investment

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store